On the formation of coalitions to provide public goods - experimental evidence from the lab
By: Astrid Dannenberg, Andreas Lange, Bodo Sturm
Contributors: Lange, Andreas; Sturm, Bodo; National Bureau of Economic Research
Series: NBER working paper series -- working paper 15967; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15967.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "The provision of public goods often relies on voluntary contributions and cooperation.  While most of the experimental literature focuses on individual contributions, many real-world problems involve the formation of institutions among subgroups (coalitions) of players.  International agreements serve as one example.  This paper experimentally tests theory on the formation of coalitions in different institutions and compares those to a voluntary contribution mechanism.  The experiment confirms the rather pessimistic conclusions from the theory: only few players form a coalition when the institution prescribes the full internalization of mutual benefits of members.  Contrary to theory, coalitions that try to reduce the free-riding incentives by requiring less provision from their members, do not attract additional members.  Substantial efficiency gains occur, however, both along the extensive and intensive margin when coalition members can each suggest a minimum contribution level with the smallest common denominator being binding.  The experiment thereby shows that the acceptance of institutions depends on how terms of coalitions are reached"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/11/2010.

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